Jagson to buy 20 Airbus 321s for $1.3 billion

14 firm orders, 6 options

BY A CORRESPONDENT
February 27, 2006

Upcoming low-cost airline Jagson Airlines is planning to acquire 20 Airbus A321 aircraft for $1.3 billion. Of the total 20 aircraft, 14 are firm orders and remaining 6 are options for a later date, as the Jagson Airlines expects to launch operations by April this year.

This follows a similar acquisition by Go Air, a start-up budget airline, which had announced plans to acquire 20 Airbus A320 aircraft for $1.2 billion. The burgeoning Indian aviation sector witnessed emergence of new airlines and over 19 million passengers flown during the last financial year ended March 31, 2005.

According to Jagson Airlines President and Chief Executive Officer Uttam Kumar Bose, "The discussions were held at the Singapore Air Show and financing modalities are being worked out and we will be signing the agreement shortly," Jagson Airlines President and Chief Executive Officer Uttam Kumar Bose said.

Jagson Airlines intends to close the deal by March and commence operations as a national operator by end of April or early May. The aircraft purchase would be funded through a combination of internal accruals and debt, he said.

The low-cost airline, which had announced plans to launch domestic operations in nine cities in India, is the only Indian airline to place orders for A-321s. The planes would be delivered in a two-class configuration. The negotiations of the deal took place between Airbus and Jagson at the Singapore Airshow.

On commencement of flights, Jagson Airlines will employ 800 people in the first year and take it to 3,000 by the third year of its operations.

It will launch services to Delhi-Bangalore in April-May and later to Patna, Mumbai, Kolkata, Guwahati, Jaipur, Dibrugarh and Goa. In the second phase, Jagson would increase the number of flights to these sectors and expand operations to Lucknow, Kochi and Hyderabad.

The company is part of the New Delhi-based Jagson group whose interests range from trading to offshore drilling.